National Innovation Systems—Analytical Concept and Development Tool

The term national system of innovation has been around for more than 20 years and today it has become widely spread among policy makers as well as among scholars all over the world. This paper takes stock and looks ahead from a somewhat personal point of view. It also gives some insight into how and why the concept came about. The paper argues that a key to progress is to get a better understanding of knowledge and learning as the basis for innovation and to understand how different modes of innovation complement each other and find support in the specific national context. A core of the innovation system is defined and it is illustrated that it is necessary both to understand micro‐behaviour in the core and understand “the wider setting” within which the core operates. Concepts used in organization theory referring to fit and misfit may be used to enrich the understanding of the performance of innovation systems. At the end of the paper I discuss some further developments needed to make the concept relevant and applicable to developing countries. Here special attention is given to institutions and capabilities supporting learning. I point to the need to give more emphasis to the distribution of power, to institution building and to the openness of innovation systems.